Randburg-based manufacturing companies have expressed regret following the 30% import tariffs imposed on South African exports by the United States government earlier this month, but remain hopeful that the sector, through government intervention and alternative markets exploration, might recover quicker than expected. The import tariffs were imposed despite ongoing diplomatic engagements between Pretoria and Washington.
In a survey conducted by the Randburg Chamber of Commerce and Industry (RCCI), member businesses within the manufacturing industry indicated that although the tariffs might have dire implications, they support the South African government on its intentions to explore alternative markets including the African continent and Asia.
The Chamber conducted the survey using a questionnaire to better understand how the developments are affecting industry players and to identify potential support mechanism needed in this regard. Seven affected companies took part in the survey and agreed that a collective effort is required to further explore new markets. “ The only way we can get around the reduction of exports to the US is to rely on other markets namely Asia, Europe and South America with multiple reciprocal trade agreements and deals”, said one member business.
The members indicated that recent developments serves as a wake up call for both government and business not to rely on one single dominant market. “America is an important strategic market for many South African based companies however, as we have learnt, having our eggs in one basket is a huge risk” he added.
The International Relations and Trade and Industry departments held a joint media briefing earlier this month, and announced emergency export support measures to assist affected exporters to mitigate threats brought by these tariffs. The departments announced that a R340 million grant has been made available to qualifying companies to apply through the Industrial Development Corporation (IDC). The measures also include granting exporters a temporary harbour from antitrust rules.
The manufacturing sector remains the cornerstone of the South African economy contributing approximately 13% to the GDP, providing employment to over 1.6 million people, accounting for a substantial portion of South Africa’s exports. The member businesses who participated in the survey shared the same sentiment that the sector has shown resilience in the past and will certainly bounce back if only domestic challenges such as cheaper labour markets and crumbling infrastructure can be adequately addressed.